Lehigh County tax cut approved

Plan cuts $5 million from Executive Hansell's proposal. He promises to veto it.

October 24, 2012|By Samantha Marcus, Of The Morning Call

A split Lehigh County Board of Commissioners on Wednesday approved a budget that directs County Executive Hansell to cut taxes and spending despite his promise of a veto.

The approved budget is sponsored by a group of five Republican commissioners and cuts taxes by 4.8 percent. It didn't draw votes from either of the board's two Democrats or its two more moderate Republicans.

The commissioners' budget cuts $5 million in spending from Hansell's proposed budget, which represents a 1.5 percent cut from the 2012 budget. Sponsors also say it gives the executive flexibility on where to cut.

In a news release this week, Commissioner Scott Ott called Wednesday's meeting "one of those tipping point moments" and encouraged residents to attend and politely support the budget.

"We're within one vote of saying 'yes' and sending a clear message that government must begin to restructure so that it's sustainable, affordable, focused and effective," Ott said.

Proponents say the spending cuts can be achieved through reductions in staff or services. They will, however, force the administration to budget based on priorities and performance measurements, Ott said.

Taxpayers obliged in droves, packing the county's public hearing room and repeatedly warning the board that taxpayers would remember votes against spending cuts and there would be consequences.

"The last election showed that when you really annoy the public, they get you back," said Bethlehem resident Stan Bialecki, urging support for the spending cuts. "They get rid of you."

Three Republican commissioners seeking tax and spending cuts — Ott, Lisa Scheller and Vic Mazziotti — campaigned on a promise of rolling back a 16 percent county tax increase imposed in 2011.

"I want to make it clear our goal is to govern the way we campaigned," Mazziotti said. "If people don't understand that yet, they're not paying attention."

The Republican-controlled board was passed the budget Wednesday 5-4. But supporters need to pick up one more vote to overcome an executive veto, and it's uncertain whether they'll be able to. If they can't muster the votes for an override, Hansell's budget wins by default.

If the tax decrease survives a veto, homeowners with properties assessed at $60,000 would see their tax bill amounts decrease from $714 to $679.50, or by $34.50. Their additional savings in 2013 — about $10 — would come from a $1.5 million countywide tax credit.

Tax bills under the competing budgets won't look all that different. Hansell's spending plan returns $6.5 million to taxpayers as a one-time tax credit; the board budget does the same in the form of permanent tax cut.

But the paths diverge in 2014 and 2015, Republican Commissioner Mike Schware said, suggesting Hansell's plan will prompt increases in those years. Mazziotti likewise warned that spending will not be cut under Hansell's plan, while Republican Commissioner Percy Dougherty argued everyone wants to cut spending but disagree how to go about it.

The administration says that tax cut budget will worsen Lehigh's structural deficit, harm operations and accelerate the need for a tax increase. Hansell criticized the board for shirking its responsibility to cut specific spending items, and threatening and demoralizing county employees.

He asked for time to identify spending cuts.

"You don't snap your fingers and cut $5 million," he said.

The administration has said that cutting taxes would worsen a structural deficit that already stands at $7.8 million. But Republican commissioners say those projections are misleading because administration regularly predicts deficits and then posts surpluses at the year's end.

Criminal Administrative Judge Kelly Banach spoke out against the $5 million spending cut on behalf of the county's Criminal Justice Advisory Board, which has said would compromise public safety and severely damage the system. President Judge Carol McGinley said the cuts show "callous indifference to the needs of the judicial system and the public in serves."

Meanwhile, Hansell's budget calls for $365 million in spending and would keep the tax rate flat. The executive proposed a $6.5 million tax credit to mitigate the impact of a mass reassessment that raised taxes on 45 percent of property owners.

The administration repeatedly defended the decision to implement a tax credit rather than a tax cut, indicating a cut that size would be impossible to maintain given a stagnant tax base and existing deficit. For the average taxpayer, the county portion of the 2013 tax bill would be about $670 and bounce back up to $714 in 2014.